Credit Systems
Conveyance and Redemption of TDC Credits
After credits assigned to the TDC Conservation Area landowner, they can be made available for sale. This is where credits actually enter the market, and develop a market value based on the negotiations of the willing buyer and willing seller. They are then conveyed, usually through a sale, but possibly by will or gift. Like all markets, the transactions are guided by the regulator, in this case the municipality.
If there are conditions that must be met before the municipality will allow a credit to be conveyed from one owner to another (such as the requirement to place a conservation easement on the TDC Conservation Area parcel as a condition of approving the sale), these must be articulated by the TDC program.
Standardized purchase and sale agreements are highly recommended. It is important for the TDC Conservation Area and TDC Development Area landowners to understand the processes of making a transaction occur, and that there is a level of confidence created as a result of the process. A purchase and sale agreement should at a minimum outline: the details of the credit(s), what property they are from, what development they are going to, the parameters around registering a title restriction, the agreed upon price, and terms and conditions associated with exchanging money for a certificate.
The guarantee of the development bonus that the credit represents is set by the municipality’s TDC Bylaw, which clearly identifies the additional development opportunities for which the TDC Development Area landowner is eligible. The guarantee of the conservation action is a title restriction which the TDC Conservation Area landowner is required to place on their parcel when they transfer their credit. It is important to note that the TDC Development Area landowner is buying a credit, not a title restriction (like a conservation easement). The municipality must develop and make clear the process by which a conservation landowner requests the conveyance of the credit, what documentation is required by all parties, how the credit is formally retired, and how this process dovetails with the existing development approval procedures.
